In my experience, the term refers to
female genitals, but in the general sense, not the specific. A pornographic
story might say, for example, "she showed me her pussy," but not "she
showed me her poontang"; however, a porno mag's claim
to have "poontang on every page" is clearly referring to female genitalia,
not women or intercourse. (Asian porn stars, however, do occasionally
use the word in the specific sense, particularly when they're pretending to be dumb whores who don't speak much English; it's
probably because it sounds vaguely Asian in origin.)

Partridge and Beale note that poontang is one of the most
mysterious of all taboo words, as its origin and etymology are obscure.
Several sources claim that it first appeared somewhere in the 1910s or
1920s (Chapman, 1995; Ayto and Simpson, 1992). Originally, it was an
African-American slang term, and was used to refer only to black women
and their private parts. Eventually, the term became common among
whites in the American South (Wentworth and Flexner, 1960), who
presumably picked it up from black communities. (Thomas Wolfe, much
to the shock of innocent readers, used the term in his novel Look Homeward,
Angel, where one character philosophizes that "a fellow's got to
have a little poontang.") Over time, the term became race-neutral, and
could be used by anyone from prostitutes to Presidents (on
Inauguration Day, JFK is rumored to have said "I guess this means my
poon days are over" (Thorne, 1997)).

As for the etymology, many authors speculate that the word derives
from putain, the French word for "whore" (Wentworth and
Flexner, 1960; Ayto and Simpson, 1992; Chapman, 1995) In particular,
Chapman (1995) suggests that it entered the English language via the New
OrleansCreole. This explanation seems probable enough given that the
term originated in the South. Furthermore, poontang is a
plausible corruption of "putain," which in French is pronounced (very
approximately) "poot-an."

Partridge and Beale, however, aren't buying this etymology, though they
don't explain why. Instead, they propose that poontang is a
corruption of Chinese phrases like poong kai and poong tai. They
further speculate that the word came from Filipino/Tagalog and entered the
language around 1900 (during the Philippine American War, I suppose). I
don't know any Chinese and can't vouch for the plausibility of this claim, but I'm told that the connection between Filipino and Chinese is remote at best--some loan words, nothing more. Even if we assume
they're right, however, this account doesn't really explain how the term
came to refer to black women in particular, or why it started out in the
American South. Their alternative explanation, which seems even less
plausible, is that it's a Native American term that entered the language
via some sort of pidgin.

The shorter version (poon) is listed separately in several
dictionaries, but the earliest references don't have anything at all to do
with females or their body parts. Apparently, before World War
I, the verb poon meant "to prop up (such as the leg of a table)
with a wedge," and, by extension, "to be unsteady" (Partridge, 1973). I
suppose one could speculate that poon eventually came to mean the
wedge itself, and then by analogy the female genitals (because of its triangular shape, which is
similar to the pattern of female pubic hair). This hypothesis would
explain the "poon," but doesn't account for the "tang," and in any case doesn't really solve
anything because the origin of the word poon in this sense is
unknown. Meanwhile, Webby claims that poon refers
to wood used for the masts of sailing ships. My own suspicion is that it's
nothing more than a back-formation that just happens to have other
archaic meanings.

Whatever the origins of poontang and its derivatives, it's
certainly one of the more bizarre words out there. Unlike otherwords, which are merely offensive or at best crude,
poontang has something of a comical air to it. That doesn't make
it polite--you'll still get slapped if you use it at the wrong time--but
it does explain why pimps, porn stars, and pubescent boys seem to say it
with such relish.